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Case Studies

Developing an ESG enhanced version of DAX for BlackRock

Asset owners

ETF providers

The need

BlackRock was looking to offer ETF clients interested in investing in German equities a sustainable alternative to its standard ETF which was based on the iconic German DAX® index.

The challenge

BlackRock wanted to provide its clients with an ETF that reflected the risk/return characteristics of the original German DAX index while also taking into account carbon reduction and ESG requirements.

The solution

Using the power of the Axioma Portfolio OptimizerTM and our leading index construction capabilities, we collaborated with BlackRock to develop the DAX ESG Target index. The index provides a portfolio optimization (re-weighting) to meet tracking error constraints (< 1.5% versus the parent DAX index) and carbon reduction goals. Additionally, the index creation incorporates ESG rating information from Sustainalytics, a leading global provider of ESG research, ratings and data. The index also applies Global Standards Screening provided by Sustainalytics as well as product involvement screens for weapons, tobacco, thermal coal, nuclear power, and oil sands.

The STOXX advantage

Open architecture framework

Enables the use of leading sustainability data providers and client data sources to improve efficiency.

Deep experience

Over 25 years of experience in developing liquid, rules-based indices to meet a wide range of investment goals.

Customer-driven innovation

We partner with our clients throughout every step of the process to co-design index solutions that are both accessible and efficient.